Building the Perfect Pitch Deck with Y Combinator

This video summarizes a Y Combinator (YC) workshop on how early-stage startup founders can create an effective pitch deck to appeal to investors. Kat Manalac, YC's Head of Outreach, shares the key elements that should be included in a pitch deck and how to construct a compelling story for investors through real successful pitch examples (Airbnb). In particular, it provides practical advice on the importance of concise and clear messaging, along with answers to common questions founders face during the Q&A session.

1. StartOut Introduction and Event Opening

The event begins with Kayla introducing StartOut, a nonprofit organization. StartOut was founded in 2009 as a US-based nonprofit supporting LGBTQ+ entrepreneurs and startup founders. Their mission is to increase the number and influence of LGBTQ+ entrepreneurs and amplify their stories, with the goal of strengthening the economic empowerment of the queer community.

Over the past decade, they've secured more than 18,000 members and supported over 400 entrepreneurs annually. StartOut's key programs include Growth Lab -- the only LGBTQ+-dedicated accelerator, a mentorship program with over 300 mentors, and an Access to Capital program providing deal flow to over 300 investors. They also host more than 50 events per year to activate the community.

Kayla introduces Kat Manalac, Y Combinator's Head of Outreach, announcing that the workshop on building the perfect pitch deck is about to begin.

2. Y Combinator and Kat Manalac Introduction, and Engaging with Participants

Kat Manalac starts by briefly introducing herself and explaining her role at YC. As Head of Outreach, she oversees content, video, social media, and press-related work, and helps many startups with their launches. She's also part of YC's admissions team, reviewing approximately 20,000 applications per batch and participating in company interviews.

Before YC, she worked for two years as chief of staff to Reddit co-founder Alexis Ohanian, which was her entry into the startup world, and where she learned a great deal about building online communities. She's been at YC for nearly 10 years, watching over 3,000 companies go through the program and helping many with their initial launches and pitches.

Kat then asks participants questions to gauge their current startup stage (idea, prototype, product launched, fundraising, YC application experience, planning to apply for the next winter batch) for a moment of interaction.

A Brief Overview of YC

For those unfamiliar with YC, Kat gives YC's 1-minute pitch. YC has been funding startups since 2005, and most companies apply with just 2-3 team members and a prototype. YC emphasizes helping startups from the idea stage all the way to IPO. To date, YC has invested in over 4,000 startups worldwide, and notable alumni include Airbnb, Twitch, Instacart, and Coinbase. Over 90 companies are valued at more than $1 billion, over 300 at more than $150 million, and 16 have gone public.

The YC program runs for 3 months -- during the first 10 weeks, founders focus on product development and talking to users, and in the final 2 weeks, they shift to fundraising mode to prepare for Demo Day. YC provides each company with individualized insights and feedback from group partners, and Kat promises to share best practices applicable to all founders today.

3. Preparing the Perfect Pitch Deck

Kat mentions the YC application before diving into the pitch deck discussion. YC is currently accepting applications for the next batch, with the deadline being September 11. Although YC doesn't look at pitch decks at the early stage and only reviews the YC application, she emphasizes that the philosophy behind constructing a pitch deck also helps in writing an excellent YC application.

3.1. Clarifying the Core Message: The 1-2 Line Pitch

Before writing a pitch deck or pitching to investors, the most important thing is to perfectly refine your 1-2 line pitch, says Kat.

"People who have thought deeply about their idea can explain it clearly and concisely. They use fewer words and can explain very complex concepts in a way that even a 5-year-old could understand."

A clear idea is the foundation for growth, and the best companies grew organically through word of mouth. Since word of mouth is the cheapest growth strategy, she advises making your pitch simple enough that people can easily remember it and pass it on to others, like TikTok or ChatGPT.

The 1-2 line pitch should include:

What you're building
Who you're building it for

Airbnb's early 1-line pitch was used as an example:

"We built the first online marketplace that lets travelers book rooms with locals instead of hotels."

She also emphasized that the pitch should never include jargon or marketing buzzwords. YC Chairman Garry Tan has noted that meaningless jargon is one of the most common mistakes startups make. For example, "Indie Cloud is a know-how synergy platform" conveys no information. Kat explained that when people hear the pitch, they should be able to immediately picture the product.

3.2. Preparing Answers to 7 Key Questions

Once the 1-2 line pitch is ready, Kat says you should prepare clear, concise answers to 7 key questions. These questions are detailed in a blog post by YC partner Michael Seibel titled "How to Pitch Your Company," and they're also useful for media communications.

3.3. 'Vertebrae' Office Hours: Selecting Key Points

At YC, two weeks before Demo Day, they conduct 'Vertebrae Office Hours' with startups. During this time, they work with each company to determine the 4-6 key points they want to imprint in investors' minds. Kat strongly encourages founders to sit down with co-founders and advisors to find the most interesting 4-6 points about their company and team, and include them in all communications.

3.4. The Minimum Viable Pitch Deck (MVP Pitch Deck)

With the 1-2 line pitch, answers to 7 questions, and 4-6 key points (vertebrae) ready, Kat explains that writing a minimum viable pitch deck becomes easy. The MVP pitch deck should be relatively short but must have a story arc.

The ultimate goals of the pitch deck are:

Explain what you do: Clearly explain so investors can understand the product.
Convince them that the problem is big and interesting, and that your team can solve it: Make investors believe the problem is important, worth solving, and that your team is the best fit.

Most commonly used slides:

Title: Describe the product with your 1-2 line pitch.
Traction: Show progress such as product launch or customer letters of intent (LOI).
Team: An essential slide for every startup deck.
Market/Business Model: Answer the question of how you'll make money.
Insight: Show special knowledge or insight that others don't have. This can come from conversations with early users or experience in the field. Since many founders at YC try to solve similar problems, what you know that others don't is what matters.

Additionally useful slides:

Problem
Solution
Market Size
Competition
Competitive Advantages
Product
User Testimonials
Customers (for B2B)
Ask
Future Plans

Kat advises that an early pitch deck of 5-6 slides is sufficient, and the remaining useful slides should be included as an Appendix for reference when needed. This helps the pitch become a conversation with Q&A rather than a 30-minute one-sided presentation.

4. Airbnb's Actual Pitch Deck Case Study

Kat used Airbnb's seed deck as an example to show how each slide is used in practice.

Title (One-liner): "We built the first online marketplace that lets travelers book rooms with locals instead of hotels." -- Concisely conveys the problem and audience.
Problem: In Airbnb's early days (2008-2009), people didn't understand the idea well, so a clear problem statement was needed, like Paul Graham's question: "Would people really want to sleep in strangers' homes?" -- She emphasized focusing on one idea per slide.
Solution: Presented the solution incorporating Airbnb's unique insight.
Market: Anticipating the question "Does this market even exist?", they proved initial market existence through CouchSurfing and Craigslist temporary housing listings that existed at the time.
Product: Including this is fine if the product is built, but it's not a required slide and can be placed in the appendix.
Business Model: An important slide answering how you make money. Beyond total addressable market (TAM), it's good to explain the go-to-market strategy and reference companies.
Go-To-Market: Showed how Airbnb acquired users through events and through Craigslist.
Competition: A slide showing competitors may not always be essential, but was necessary for Airbnb in what was an unfamiliar space at the time.
Competitive Advantages: Mentioned as a slide that could be included in the appendix.
Team: Showed the strengths of a team comprising 1 software developer and 2 designers, answering "Why can our team solve this problem?" -- Emphasized as an absolutely critical slide.
Press: Since YC doesn't see press coverage as having a major impact on investment decisions, this slide is recommended for the appendix.
User Testimonials: Information about users is very important. If the product has launched, metrics like engagement and retention are attractive; at early stages, getting personal testimonials from a handful of users is also good. For B2B companies, including well-known logos on the customer slide, testimonials, or case studies works well.
Ask: Airbnb was raising $500,000 in angel investment and presented future goals. This is a very important part.

5. Additional Tips for Creating Your Pitch Deck

Kat shared several useful tips to consider when creating a pitch deck.

Keep it concise and clear: Everything on each slide should be simple and clear, without cramming too much information. Present only one point per slide, and split slides when you need to convey multiple points.
Start with your strongest content: If you have strong traction, lead with that; if the team is impressive, start with the team. When determining your 'vertebrae,' rank your strongest stories.
Graph labeling is mandatory: Investors at Demo Day reportedly get upset seeing unlabeled graphs, so always label your graphs.
Avoid complex diagrams and screenshots: Investors typically look at each slide for less than a minute, so make everything as clean and easy to understand as possible.
Include only real traction: Things like "pipeline," "active conversations," and "unbooked revenue" are not considered real traction. These can be mentioned in conversation but shouldn't be included in the pitch deck.
Maintain consistent formatting: Keep fonts, colors, and layout consistent to demonstrate professionalism.
Every slide and word matters: Remove or move to the appendix any slide or word that doesn't make investors want to invest.

5.1. Tips on Pitch Delivery

Know your numbers and practice: Especially at the early seed stage, investors may find it hard to directly judge a product's value, so knowing your numbers well and practicing your pitch extensively is important.
Organize the conversation: Think through and structure the flow of conversation in advance.
Speak confidently and slowly: When excited, it's easy to speak quickly, but confident founders speak slowly.
Engage with investors: Don't talk one-sidedly for 30 minutes -- communicate with investors throughout the conversation.
Research investors: Research who the investor is, what fields they're interested in, and what companies they've invested in, then ask questions and guide the conversation. The best investor meetings flow like office hours with back-and-forth dialogue.
Anticipate and prepare for tough questions: Predict the 10 hardest questions that could come up about your company or space, and prepare answers in advance.

5.2. Setting Next Steps

Always clarify the next step: Don't end an investor meeting without a next step. Set a specific next step like "Can I follow up with you in a week?"
Make your 'Ask' clear: Clearly include in the pitch deck how much funding you're raising. Asking investors about their typical investment size is also a good approach.
Don't hesitate -- just try: Don't hesitate about next steps; actively ask and move forward.

6. Q&A Session

Kat answered a variety of participant questions with practical advice.

6.1. Pitch Deck Strategy When Product Hasn't Launched and No Traction (Q)

When the product hasn't launched yet and there's no traction, what storyline should founders follow, and should they wait for traction before applying to YC?

"For YC, building a product or having traction is not required. 60% of the companies YC invests in have unlaunched products."

For biotech or hardware companies where product launch is difficult, she advised targeting metrics like Letters of Intent (LOI) from potential customers or achieving scientific milestones. For software companies, having a launched product and traction is nice to have, but not required for YC applications.

6.2. YC's Special AI Application Round (Q)

YC is accepting AI applications -- is this a special application process?

YC launched a special off-cycle early interview round for AI companies on Friday. It follows the same YC application process, with a special interview round this Friday. Even if you don't get accepted this time, you'll have another chance to apply for the winter batch.

6.3. Community Building Strategy (Q)

What approach should be used at the early stages of community building (from 1 to 100 people, and beyond)?

Leverage your network: YC companies launch products to each other first through the internal platform 'Bookface.' If you're not part of YC, you need to leverage college networks, friends and family, and other personal networks.
Find early users: It's important to identify which communities your product's early enthusiasts belong to. One of Kat's partners pitched an early ovarian cancer diagnostic device to their own OB/GYN, emphasizing that at the earliest stages, using your network to find potential customers is critical.
Use social channels: Once you've found early users, you can expand through social channels like Hacker News, Subreddits, and Product Hunt.
Leverage LinkedIn: Recent YC companies have been acquiring many early users on LinkedIn.
10 passionate fans: Kat cited the YC adage "Find 10 people who would be genuinely sad if your product disappeared" -- 10 passionate fans are more important than 1,000 lukewarm users, because those 10 will spread the product virally.

6.4. Types of Pitch Decks (Q)

Should you create separate decks for live presentations and for sending as documents?

"One deck is sufficient. Just make it concise and clear enough."

In a live pitch you may be able to elaborate on certain parts, but the core content should be deliverable in a single deck.

6.5. Financial Slide Details (Q)

For people sitting at the back of pitch events, even labeled graphs can be hard to read. What key information should go on financial slides versus the appendix?

"At Demo Day, we don't go deep into financials. The goal of a pitch event is to elicit the reaction 'I want to learn more about this company' and create an opportunity to talk in more detail with the founder."

At pitch events, it's best to only briefly mention the business model (how you make money) and explain detailed financial metrics like customer acquisition cost (CAC) and cost of goods sold (COGS) in individual meetings.

6.6. Applying to YC with a Soft-Launched Product (Q)

Can you apply to YC with a soft-launched product?

"Yes, absolutely. You should."

6.7. Difficulty of Problem Explanation (Q)

How do you pitch complex problems like women's health issues that require more explanation?

"You must include a problem slide and explain why it's a problem and how big the problem is. Assume you're pitching to someone who knows absolutely nothing about this issue."

Kat recommended YC partner Surbhi Sarna's book Without a Doubt, referencing her experience founding a women's health company, overcoming 100 investment rejections, and ultimately being acquired by Boston Scientific for $275 million.

6.8. Level of Detail in the Fundraising Ask (Q)

How much detail about fundraising should be shared on the Ask slide of the pitch deck?

"You must be clear about your target amount -- how much you're trying to raise."

She also suggests considering a "backup amount" -- the minimum needed if the target isn't reached. Details can be discussed in in-person meetings.

6.9. Unregistered Company and Unconfirmed Co-Founder (Q)

Can you still get help from YC if your company isn't registered yet or your co-founder isn't confirmed?

"Yes, we invest in companies that aren't incorporated yet. You can use online tools like Stripe Atlas or Clerky."

YC also invests in solo founders, but she was honest that only 4-5 of the top 100 companies were founded by solo founders, making it much harder. She strongly recommends starting and applying with a co-founder, and YC also runs a co-founder matching platform where 13 companies in the last batch were formed through matches.

6.10. Personal Motivation of the Founding Team (Q)

Should the founding team share personal motivation or journey in the pitch deck, or focus on solving the business problem?

"The pitch deck should focus on solving the business problem. But including a line or two of personal motivation in the founder bio is good."

The YC application includes a question about why you want to solve this problem, and having a personal connection to the problem is positive because it gives investors confidence you'll stick with it for the next 10 years.

6.11. What YC Expects from Pre-Launch Applicants (Q)

What does YC expect from pre-launch stage applicants?

A balanced team: YC values the team highly. They prefer teams with technical capability to build the product (for software products) and sales capability.
Clear and concise communication: They prefer applicants who demonstrate deep thinking about the problem and solution in their application and interview.
Founders' backgrounds: They look at how co-founders met, their unique insights, and impressive past achievements.
Domain expertise: Having a deep understanding of the problem you're solving through previous work or academic research is a plus.
Flexibility: They understand that initial ideas can change and are more interested in the team than the idea. If the team is strong but the idea raises doubts, they sometimes ask if there are other ideas.

6.12. Bootstrapping and Pitch Decks (Q)

If you prefer bootstrapping (self-funding), should you still create a pitch deck and build interest in case you want to raise investment later?

"If you truly don't want to raise investment, you don't need to spend a lot of time on a pitch deck."

However, creating a deck to organize your thinking and prepare for potential investment opportunities isn't a bad idea. The important thing is to focus on building the product.

6.13. Importance of Founder-Market Fit (Q)

How important is founder-market fit? Can a team of newcomers to a field like AI still be attractive to YC?

"Absolutely. The Airbnb founders had zero experience in the hospitality industry."

YC is curious about what connection founders have to the problem they're solving. For technically deep fields like AI, having a technical expert on the team is beneficial but not required. Like solo founders, if you have gaps, you may need to prove yourself through extra effort, but that shouldn't stop you from applying.

6.14. Pitch Decks in Regulated Industries (Q)

In heavily regulated industries like healthcare, how much should you show regarding clinical trial results, regulatory approvals, patents, and HIPAA compliance?

"At the very early stage, these things aren't critically important."

YC has a community of bio and healthcare founders who can help navigate complex processes like FDA approval.

6.15. Investment Structure for Web3 Projects (Q)

For Web3 projects, does YC invest only in equity, or in a combination of equity and tokens?

"YC applies a standard deal to all companies."

Kat shared a link to YC's standard deal.

6.16. Pre-Application Mentorship/Advice from YC (Q)

Can you get mentorship or advice from the YC team before applying?

"We currently receive too many applications to provide individual feedback to everyone."

However, if you reach the interview stage, you receive specific feedback regardless of acceptance, and many companies improve based on this feedback and successfully reapply. In fact, over 50% of companies YC has invested in include founders who had applied more than once, so she strongly encourages reapplying even after rejection. Reaching out to YC alumni for advice is also a good approach.

6.17. Differentiation in a Crowded Market (Q)

In a crowded market like mental health, how should you showcase your differentiators?

"In crowded markets, we love seeing a new Insight."

Since YC reviews 20,000 applications every 6 months, they enjoy learning something new. Like the wave of 'Uber for babysitters' companies in 2015, among similar ideas you should emphasize 'why people use our product,' 'what approach we use that competitors don't,' and 'what our team's strengths are.' Highlighting insights gained from conversations with customers or potential customers, and showing team strengths and fast execution speed, are important. Even if you applied before and were rejected, showing significant Traction in the next batch greatly increases your interview chances.

6.18. Live Demos in Pre-Seed Meetings (Q)

How should live demos be used in pre-seed meetings?

"Demos that clearly showcase the product's strengths or show how well the product works are very useful."

The YC application requires a demo video, and sometimes live demos are requested during interviews. Recording a demo with tools like Loom, or launching on platforms like Product Hunt so people can try it firsthand, are also good approaches.

7. Closing

Kat Manalac reemphasized that the YC Winter 24 batch application deadline is September 11, and while late applications are accepted, applying on time is recommended. She invited those with unanswered questions to contact her at kat@ycombinator.com and expressed hope that many founders would apply to YC. Kayla thanked Kat for her presentation and Q&A, asked attendees to join StartOut's next events, and wrapped up the workshop.